Should you move for a new job? Ready to move for a new job? Many people would not think twice and say – yes, let’s go! Here is the typical situation. A headhunter has called from with an attractive position in a different city. Or you see on your company’s online job board that a great opportunity has opened up on the East Coast. Somehing that would never be available to you in San Antonio, where you currently reside. Your HR manager proposes a three-year term abroad as your next career step. Whatever the scenario, you are excited about the opportunity to get ahead professionally. We live in a mobile word, what could be wrong with moving for a better position?
Quite a few risks at once
In short: A lot. Since you are changing several variables at once, together they increase your risk of dissatisfaction exponentially — changes in job, home, neighborhood, daily habits (e.g., no more saying “hi” to the coffee shop gal), friends (e.g., no more Tuesday nights with buddies from church), and so on. You know what you will give up, but you don’t know what you are getting in return, you can only guess — both with regard to the new job and the new location. And, added to that, there might be financial and tax issues as well.
No matter your good vibes with your new boss or the many promises made to you, how the new position will turn out is unknown. You might arrive and your title and position have already changed for the worse (as happened to me once). Or the job you encounter is fine, but two months later you get a new boss who makes your life difficult. Or you are just a bad cultural fit which is nobody’s fault. Now, if you faced these challenges in the city where you used to live, the world would not come to an end. Your social network, family, and friends would still be the same, as would be your evening and leisure activities. Your surroundings give you stability which in turn may help you cope with the job situation. And if you have to change your job again, so what? Everything else is the same.
It’s a new situation
Now, consider the same job issues after you have moved hundreds of miles away. It’s a new town; you have not even joined any local charities or clubs yet. Additionally, your wife, who gave up her position for you, is still looking for something adequate. Also picture the kids who are unhappy about the much longer time it takes them to get to the new school. You changed many variables in your life, now stress at home and at the new company is compounding — and there is no easy way out.
Happiness in life is more than your job. It is highly affected by your surroundings and location. The best job in New York City is not worth it, if you can’t stand living in or near a big city. The most promising position in the suburbs of Columbus, Ohio, is not a good fit if you hate living in the middle of nowhere. The next career step in Brazil will doom you if you can’t stand being surrounded by non-English speakers all day long. You don’t live in vacuum. Independent of the success (or lack thereof) in your new job, your new location should be adding to your happiness, not subtracting from it.
Living costs and tax risks
If you contemplate moving to a different state or even country, things get tricky very fast. There are huge differences in state taxes and living costs within the U.S. Moving from Austin to New York City with a 25 percent jump in compensation might still make you poorer. But there is more — some states have estate taxes or even both estate and inheritance taxes. If you have older family members or friends that might bequeath you something sizeable, you might end up with less money overall compared to staying where you are right now.
Do you have an US passport?
It gets worse if you are an American citizen who considers living abroad. The U.S. is the only major industrial nation that taxes its citizens while living outside its borders and thereby subjects them to the joy of double taxation (note: the world outside the U.S. by and large runs on a sensible territorial tax system — a person or company pays taxes based on residence, not based on the passport.) Despite a limited exclusion of foreign income on your U.S. return and notwithstanding any tax help from your company, you will certainly be caught somewhere in inconsistent tax systems. You will face double taxation, or more precisely, pay the maximum of the two respective tax rates on some income, most likely with regard to investments, capital gain/losses, and pension plans. Adding insult to injury, you also have to fill out cumbersome annual tax forms to report your foreign accounts as a result of your time abroad. Remember, you — not the company you work for — are on the hook for all tax related matters in both countries.
Moving for a job can be the best thing for your career. Moving to a new location can also give you many additional benefits, both personal and professional beyond your job. I have moved across continents and countries many times for better opportunities, but I also turned several down because of the potential issues mentioned above. And when I moved, I tried to manage my risks — see my next blog posts on how you can do the same.
© 2019 Michael Froehls – All Rights Reserved
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